Marketers know they need to restructure and beef up their organizations to deal with the seemingly constant permutation of media, and consequent changes consumer behavior.
The Economist Intelligence Unit has done a study on behalf of marketing enterprise software company Marketo, Inc., to get CMO perspectives on how well marketing is keeping up and how it can do better. The firm polled 478 senior marketers and CMOs around the world on what they perceive as top challenges today and over the relatively short term — three to five years — and where they plan to spend money to address them. One thing that just about all of them agreed upon: their organizations will need to undergo dramatic changes in order to keep up with increased technical and consumer demands.
In the survey, more than half of which were CMOs or in top marketing positions (about 30% each in North America, Europe and Asia-Pacific, and about 10% in Latin America) over half said they think their companies are doing a bad job of using data and technology to engage their customers. But they said they are investing in fixing that, and over three-quarters of them said they will dedicate budget to bringing in expertise in data analysis and marketing operations.
The four investment areas are social marketing software, mobile marketing, engagement software and data analytics, and email marketing systems. About 40% surveyed said businesses will have to hire to fill digital engagement and marketing operations and technology ranks. Good news for classics majors: Nearly as many said payroll will have to include strategy and planning.
"The transformation taking place in marketing is profound as marketers race to adopt technology and add skills that will allow them to manage the entire relationship with the customer," said Sanjay Dholakia, CMO at Marketo, in a statement.
Marketers polled said they see their division moving from being a cost center to a revenue generator. Sixty-eight percent of them said right now the rest of their company views their department as a cost center only. But in three to five years about four out of five companies will classify the marketing function as a revenue driver.
They also see marketing growing into being a "chief customer advocate" over the next three years, and see their involvement in managing the end-to-end customer experience growing. A third of marketers report being responsible for managing the customer experience, and 75% of them said they expect that over the next three to five years they will find themselves responsible for "the customer's lifetime end-to-end experience." Dholakia said ownership of that relationship puts marketing "right at the center of revenue generation and setting the company strategy." He said driving customer engagement strategy will require them to embrace the use of digital marketing software.
Right now, per the report, barely half of all marketers use data to gain insights and engage customers. But most of the marketers said that in three to five years they will use data to make the connections with customers.
In terms of measuring engagement, over half said the performance indicators are in customer renewals, retention and repeat purchases, with three-quarters saying engagement is a down-funnel phenomenon. Fifteen percent see engagement directly as revenue influencer. What's love got to do with it? Not too much: only 22% said that intangible sentiment has a lot to do with the brand relationship.
Finally, the future will be shaped by connected no-interface devices (the "internet of things"), and real-time personalized mobile technology. Over half of marketers expect the embedded-connectivity devices to become central to marketing and customer experience by 2020 and see real-time personalized mobile communications as the trend with the biggest impact.